Pitching in the Valley

Spent last week with my boss pitching our big idea to the Venture Capitalists (VCs) in Silicon Valley.

This is truly the beating heart of capitalism. It is like all of the money in the world is piled up in this corner of it, waiting to get redistributed and magnified. The money typically belongs to very rich people, known here as High Net Worth Individuals. They work through VC firms who gamble their money on supplicants with ideas (like us). The heart of Silicon Valley is Sand Hill Road. An office here costs $250,000 a month. Yes, really.

The first morning we set off around 6.00am driving along the I101 for appointments with VCs. The boss is uncharacteristically nervous, and practises his “deck” (presentation) as we stop in a Starbucks at 7.00am for breakfast. I have never known anyone to drink so much coffee.

Meet a nice Indian man at the first VC stop. He was attentive, and genuinely seemed to like what we had. Next stop was at Foster City where we strut our stuff to a more sceptical guy. But by the end I think we had talked him around.

After lunch in a Diner (I ate too much. But it is hard not to eat too much at an American Diner), we headed over to a VC Shindig at the Computer Museum (which is itself amazing). Here a whole bunch of VCs meet a whole bunch of people like us, pedalling our wares. The advice is that VCs really need to "fall in love" with entrepreneurs if the whole thing is to work out. If our first two meetings were arranged dates, this was speed-dating.

Unfortunately we had to leave early, as a call came through that a serious player wanted to meet with us. Turned out that the "serious player" couldn't meet with us after all, which was a bit of a bummer. But overall a good day's work.

This business has its own lingo. An “Impedance mismatch” means that what you doing and what they are interested in, don't match. The “Delaware flip” means moving the business to America. And sometimes you need to “clean up the cap table”. I still have no idea what that means. Anyway the point of the exercise is to come away with something called a “term sheet”.

Next day another early start, and we went back to the speed dating event. We spent half an hour with one guy who was very interested in our technology. But it turned out that he didn't have any money!

Then IDA Ireland turned up. And they really do a great job! The IDA woman, dressed entirely in green – which luckily quite suited her - gave a great speech with a simple powerful message. The next talker commented on how hard it was to follow that lovely accent. I felt sorry for a nice Scottish guy who had a great idea, but no such visible support.

I was expecting lots of young tee-shirted entrepreneurs and for me to be the oldest person there. But not at all! An experienced management team was a sine qua non, and the ideas guy sitting next to me must have been in his eighties. Almost everyone is wearing a suit and a tie. Very few women.

Many of the ideas people were Indian, Asian or Jewish. All very serious and very smart. However there was one surreal moment when a couple of guys who sounded like they were from New Jersey turned up to give a pitch. It was like the Sopranos meet Silicon Valley. Which gave me a great idea for a pilot for a sitcom.

We had one VC meeting that afternoon. Myself and the boss have perfected our pitch, and this guy was mightily impressed.

Next morning up at six and off to Sand Hill Road for five more meetings. Myself and the boss agree on this Bluegrass station, occasionally flipping to a Country and Western station which seems to specialise in cheatin’ songs. (I hope Mary is behaving herself back home!) Traffic on the 101 is terrible.

Anyway all of these meetings go really well. At the start the VC would typically wonder – who are you guys again, who got you the introduction? Then at around the half hour mark they would suddenly sit up straight and pay attention as the penny would drop – wow this was a really hot idea! Me and the boss make the ideal entrepreneurial team – the smart business man with the vision and the academic with the invention. In that regard we are straight out of central casting. Which helps. It is all about “pattern matching” and it helps to match the anticipated pattern.

After a while it all became a bit of a blur. Finally back home. The Dublin taxi driver has a theory – straight out of Myles na Gopaleen – that England is about to split in two. The reason being that England is flooded, and it has a lot of very deep disused mines, which must be filling up with water. The weight of which will surely cause the landmass to break in two. It was a prospect that he rather seemed to welcome. It was good to be home.